Transportation Secretary Ray LaHood responded to reports released today by the DOT Office of Inspector General (OIG) and the General Accounting Office on the DOT's popular ‘Cash for Clunkers' program and announced next steps for closing it down. "Cash for Clunkers was wildly successful," said Secretary LaHood. "In a matter of weeks, Americans traded in nearly 700,000 gas-guzzlers for more fuel-efficient cars, improving the environment and providing a lifeline to the auto industry. Our program was a win for everyone, and most importantly it gave the economy a shot in the arm at a time when we desperately needed it."

The Cash Allowance Rebate System (CARS), or "Cash for Clunkers," successfully completed its top objectives set out by Congress: stimulating the economy and aiding the environment through increased car sales and reduction of older, less fuel-efficient vehicles on the roads. In fact, the program saw a 60 percent improvement in fuel economy between the trade-in and new cars purchased.

With final dealer payments being processed under the enormously successful CARS program, U.S. Transportation Secretary Ray LaHood announced today that the agency has crossed the finish line for paying back eligible and complete dealer submissions. "This is the final curtain call for a program that took the entire nation by storm and succeeded beyond expectations," said Secretary LaHood. "There can be no doubt that this program drummed up more business, for more people, in more places, at a time when our economy needed help the most." With the $3 billion provided by Congress to run the CARS program, consumers turned in gas guzzlers and bought nearly 700,000 more fuel efficient vehicles in fewer than 30 days. In August alone, retail sales rose by 2.7 percent, due in large part to a notable 10.6 percent boost in sales by auto dealers. Ford and General Motors recently announced production increases for both the third and fourth quarters as a result of the demand generated by the program. Honda also said it will be increasing production at its U.S. plants in East Liberty and Marysville, Ohio and in Lincoln, Alabama. In addition, the program provides good news for the environment, a 60 percent improvement in fuel economy between the trade-in and new cars purchased.

The CARS program came to a close Tuesday night with nearly 700,000 clunkers taken off the roads, replaced by far more fuel efficient vehicles. Rebate applications worth $2.877 billion were submitted by the 8 p.m. deadline, under the $3 billion provided by Congress to run the program. Cars made in America topped the most-purchased list, from the Ford Focus to the Toyota Corolla to the Honda Civic. "American consumers and workers were the clear winners thanks to the cash for clunkers program," said U.S. Transportation Secretary Ray LaHood. "Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life and consumers bought fuel efficient cars that will save them money and improve the environment." "This is one of the best economic news stories we've seen and I'm proud we were able to give consumers a helping hand," Secretary LaHood said. According to a preliminary analysis by the White House Council of Economic Advisers, the CARS program will:

* Boost economic growth in the third quarter of 2009 by 0.3-0.4 percentage points at an annual rate thanks to increased auto sales in July and August.
* Will sustain the increase in GDP in the fourth quarter because of increased auto production to replace depleted inventories.
* Will create or save 42,000 jobs in the second half of 2009. Those jobs are expected to remain well after the program's close.